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Can APLD's $36B Contracted Revenue Base Drive Long-Term Growth?
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Key Takeaways
APLD's $36B contracted revenue base spans 1.41 GW across five campuses, backed by long-term leases.
APLD expects over 600 MW online within 12 months, following a 322% surge in fiscal first-quarter revenues.
APLD faces financing and construction risks, while Core Scientific and TeraWulf intensify competition.
Applied Digital (APLD - Free Report) has a substantial foundation for long-term growth from its $36 billion contracted revenue base, provided it can convert contracted capacity into operating assets and recurring revenues. As of Aug. 31, 2026, APLD had approximately 1.41 GW of contracted critical IT load across five campuses, representing about $36 billion of contracted revenues over initial base terms. The portfolio is backed by CoreWeave and investment-grade hyperscalers, with leases generally structured for 15 years and on a take-or-pay basis.
The company is beginning to demonstrate this conversion. Polaris Forge 1 reached 250 MW of operational capacity on Oct. 1, while APLD expects to place more than 600 MW into service over the next 12 months. First-quarter fiscal 2027 revenues surged 322% year over year to $341.9 million, while HPC Hosting generated $262.6 million, including $65.8 million of base rent.
However, investors should not equate the backlog with immediately realized revenues. Much of the contracted capacity remains under construction, while APLD had $6.4 billion of debt and $3.7 billion in cash, cash equivalents and restricted cash at quarter-end. Customer concentration and construction and financing requirements remain important risks.
Overall, APLD's $36 billion contracted revenue base can support long-term growth, but sustained growth depends on successfully financing, completing and bringing contracted AI capacity online while increasing recurring base-rent revenues. The growth outlook is also reflected in the Zacks Consensus Estimate, which projects for fiscal 2027 and 2028 revenue growth of 49.67% and 107.93%, respectively, underscoring the potential for APLD's expanding AI infrastructure portfolio to translate its contracted revenue base into substantial top-line growth.
APLD Faces Stiff Competition in Contracted Revenue Base
Core Scientific (CORZ - Free Report) is narrowing APLD’s contracted-revenue lead, with more than $24 billion in contracted revenues and about 1.1 GW of contracted capacity. Core Scientific also added an AMD agreement representing over $14 billion of base contracted revenues across 15 years. With expansion potential beyond current commitments, Core Scientific presents a growing contracted-revenue challenge to APLD.
TeraWulf (WULF - Free Report) , meanwhile, is building substantial contracted visibility, reporting roughly $27 billion of contracted revenues and 839 MW of leased capacity. TeraWulf’s 401-MW Anthropic lease contributes approximately $19 billion over 20 years, and the company targets another 250-500 MW of annual contracted capacity growth. This combination gives TeraWulf a credible path to challenge APLD’s contracted-revenue growth narrative.
Shares of APLD have lost 2.9% year to date, underperforming the broader Zacks Finance sector’s 4.2% rise.
APLD’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, APLD trades at a trailing twelve-month price-to-book (P/B) ratio of 4.02, higher than the Finance – Miscellaneous Services industry’s 2.96. The company carries a Value Score of F. A price-to-book ratio above 1.0 means the stock is trading at a premium to its accounting net worth.
APLD’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Applied Digital’s fiscal 2027 bottom line is currently pegged at a loss of $1.09 per share, unchanged over the past 30 days. The projected loss is wider than the 91-cent loss recorded a year ago.
Image Source: Zacks Investment Research
APLD stock currently carries a Zacks Rank #5 (Strong Sell).
View the Zacks #1 Rank List
Image: Bigstock
Can APLD's $36B Contracted Revenue Base Drive Long-Term Growth?
Key Takeaways
Applied Digital (APLD - Free Report) has a substantial foundation for long-term growth from its $36 billion contracted revenue base, provided it can convert contracted capacity into operating assets and recurring revenues. As of Aug. 31, 2026, APLD had approximately 1.41 GW of contracted critical IT load across five campuses, representing about $36 billion of contracted revenues over initial base terms. The portfolio is backed by CoreWeave and investment-grade hyperscalers, with leases generally structured for 15 years and on a take-or-pay basis.
The company is beginning to demonstrate this conversion. Polaris Forge 1 reached 250 MW of operational capacity on Oct. 1, while APLD expects to place more than 600 MW into service over the next 12 months. First-quarter fiscal 2027 revenues surged 322% year over year to $341.9 million, while HPC Hosting generated $262.6 million, including $65.8 million of base rent.
However, investors should not equate the backlog with immediately realized revenues. Much of the contracted capacity remains under construction, while APLD had $6.4 billion of debt and $3.7 billion in cash, cash equivalents and restricted cash at quarter-end. Customer concentration and construction and financing requirements remain important risks.
Overall, APLD's $36 billion contracted revenue base can support long-term growth, but sustained growth depends on successfully financing, completing and bringing contracted AI capacity online while increasing recurring base-rent revenues. The growth outlook is also reflected in the Zacks Consensus Estimate, which projects for fiscal 2027 and 2028 revenue growth of 49.67% and 107.93%, respectively, underscoring the potential for APLD's expanding AI infrastructure portfolio to translate its contracted revenue base into substantial top-line growth.
APLD Faces Stiff Competition in Contracted Revenue Base
Core Scientific (CORZ - Free Report) is narrowing APLD’s contracted-revenue lead, with more than $24 billion in contracted revenues and about 1.1 GW of contracted capacity. Core Scientific also added an AMD agreement representing over $14 billion of base contracted revenues across 15 years. With expansion potential beyond current commitments, Core Scientific presents a growing contracted-revenue challenge to APLD.
TeraWulf (WULF - Free Report) , meanwhile, is building substantial contracted visibility, reporting roughly $27 billion of contracted revenues and 839 MW of leased capacity. TeraWulf’s 401-MW Anthropic lease contributes approximately $19 billion over 20 years, and the company targets another 250-500 MW of annual contracted capacity growth. This combination gives TeraWulf a credible path to challenge APLD’s contracted-revenue growth narrative.
APLD’s Share Price Performance, Valuation & Estimates
Shares of APLD have lost 2.9% year to date, underperforming the broader Zacks Finance sector’s 4.2% rise.
APLD’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, APLD trades at a trailing twelve-month price-to-book (P/B) ratio of 4.02, higher than the Finance – Miscellaneous Services industry’s 2.96. The company carries a Value Score of F. A price-to-book ratio above 1.0 means the stock is trading at a premium to its accounting net worth.
APLD’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Applied Digital’s fiscal 2027 bottom line is currently pegged at a loss of $1.09 per share, unchanged over the past 30 days. The projected loss is wider than the 91-cent loss recorded a year ago.
Image Source: Zacks Investment Research
APLD stock currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.